This is a very interesting technique I learned from this video as I have never used ATR for forex trading. ATR measures the average true range of the top to bottom of what you can see in terms of that currency pairs range for that time frame.
The author of this video explains how to use this indicator for break outs. According the author of this video Average True Range indicator can be used to find healthy breakouts.
The author also explained an example of ATR for 2007 USDCAD currency pair.
The author explained the use of ATR on a daily chart. Since it is explained on a daily chart he also recommends staying in the position opened for a long time like a couple of weeks.
The author explained that if a break out occurs after a period of consolidation in daily chart and if the gain in the average daily range is more than 10% that means its a perfect breakout. That means the pair may move a large number of pips like 500 pips or 1000 pips in the same direction.
Check the following video.
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